Why Hong Kong is the future of Private Equity
- Listen closely to what you have to say.
- Most likely give you a size-able stake of equity.
Private Equity in the United States
Private Equity in Hong Kong
Thank you for your email. The management of private equity funds is not explicitly defined in any of the ten types of regulated activities. Type 9 regulated activity refers to the management of securities or futures contracts and real estate investment scheme management. “Securities” and “futures contracts” are defined in Part 1 of Schedule 1 to the SFO. Whether or not the management of private equity funds requires a licence will depend in part upon whether the private equity fund includes “securities” or “futures contracts” as defined in Part 1 of Schedule 1 to the SFO. As an observation, we note that some private equity funds may also invest in listed stocks or other securities. In these cases, a Type 9 licence will be required.
In addition, pursuant to section 114 of the SFO, a person must be licensed to carry on a business in a regulated activity or hold himself out as carrying on a business in a regulated activity. Accordingly, whether a person needs to be licensed, depends on whether the activity he is conducting or holding himself out as conducting, falls within one of the ten types of regulated activities.
To be a licensed corporation, a firm should have at least 2 approved responsible officers who have satisfied the SFC’s competence requirement. Also, the firm needs to put in place adequate internal controls and measures, etc. Also, there is a minimum capital requirement. You may refer to a number of publications we have posted on our website for more information:
Licensing Information Booklet
Guidelines on Competence
Fit and Proper Guidelines
Codes of conduct for persons licensed by or registered with the SFC
Thank you for attention.
Please note that the above information is provided to give you an idea of the current thinking of the Commission staff. You should seek independent legal or other professional advice before taking action on the matters discussed or if you have any doubt about how the law applies to you.
Regards, Licensing Department Securities and Futures Commission 8th Floor, Chater House, 8 Connaught Road Central, Hong Kong Tel: (852) 2840 9222 Fax: (852) 2501 0375